japan. a senior leader in beijing has welcomed a group of elder statesmen from japan. they are taking turns of criticizing each others over islands in the east island sea. he says it's time to put ties back on track. he holds the fourth most powerful position if the party. he met with japanese lawmakers. japan nationalize the islands two weeks ago. china and taiwan claimed the territory. that has put relations in an unprecedented situation. one of the japanese delegates says tension in the room was extremely high. the former speaker of japan's lower house says japan should take measures to correct the

current circumstances. >> translator: what is needed most is leaders of both nation talk in a diligent and calm manner. >> he said he stressed the importance of getting business between the countries back to normal as soon as possible. a man who helped shape a u.s. foreign policy are asking both sides to take a step back. he was a senior advisor to george w. bush. we sat down to get his views on the situation. >> reporter: former deputy secretary richard is an expert on security issues in the asia pacific and the japan-u.s. allian. his art is to bring calm to the situation. >> i think japan should do what japan can do to cool tempers, to explain to our public what's at

stake here. i realize this is a difficult time for japan because of what will be impending elections but it's also difficult for china because of her impending power transfer, not elections. i think if that can be put in the minds of people clearly we'll have enough time to be able to resolve this in a reasonable way. >> the job of the u.s. is to keep the temperature cool. nay are actively working behind the scenes. >> i know the government of the united states is quietly talking japan and china. we have failed our growing relationship with china.

>> amitage view reflects growing concern among american officials. the u.s. government remain a neutral stance. because japan controls the territory japan u.s. security treaty extends to the islands. chinese vessels have been navigating the waters around the island. japan coast guard crews have been keeping an eye on them. obviousers fear an absence of dialogue and the crisis mechanism could lead to unintended consequences which could mean the united states would not be able to stay neutral. >> japan and china are said to

mark 40 years. organizers have cancelled a number of events. government officials celebrated the friendship year for japan china people to people exchanges. as of thursday 29 events in both countries have been cancelled or postponed. japan airlines reports that about 12,000 seats for its group tour bookings have been cancelled. some car dealerships in china have scrapped their plans to display japanese vehicles at an international motor show. dealers of honda and subara brand decided not to participate in the annual show. it opens on wednesday. japanese automakers have showcased their vehicles for years. some protesters launched

campaign to boycott japanese products and destroy japanese cars parked on city streets. vietnam and other southeast asian economies are in line to benefit from the tensions. >> reporter: members of the commerce and industry have visited capital this week. the group is headed by the chairman. they have meetings with vietnam's minister of industry and trade and the representative of the chairman of commerce. the goal is to expand their business in the country.

following the recent japan protest he's growing anxious about china. employees with their own business were to remain inside their hotel. >> translator: i cannot easily dispel my risks about operating in china. it made me think we should start considering moving our business somewhere else. >> reporter: vietnam has been trying to end foreign problems. the timing couldn't be better for vietnam. >> translator: the people have

positive feelings about japan. they are facing problems but we don't have to worry. in that sense there's no mental stress. >> reporter: east asian countries look impressive. spanish leaders are poised to make stringent cuts in their latest budget plans. they too are tighten their belts. ramin, you showed us those pictures from greece. now this. >> reporter: the focus is going to be on spain. many are questioning whether they can push through these pretty stringent cuts in their budget. spain is going to release the austerity budget plan for next

year. it proposes a 50 billion dollar reduction through spending cuts and tax hikes. under the plan ministries are to cut their budgets by an average of 8.9%. public sector labor cost will be reduced by 3.9% through salary freezes. this will be achieved for an increase in the value added tax rate introduced earlier this month and a new tax on lottery winners. with the new budget the government aims to cut the deficit to 4.5% of the gross domestic product in 2013. it aims to lower the rate to less than 3% in 2014 to fulfill its pledge to the european union. observers say the government may face difficulties to achieve its reduction target this year.

they site sluggish growth due to a deteriorating economy than many analysts had expected. let's get a check on the market. prices rose in new york overnight as they cheered spain's effort to fix troubled finances. we got some economic data and what can you tell us about that? >> before i talk about the stock market let me dpgive you the headline figures. the industrial out put fell 1.3%. that's the second straight month of decline and it is worse than whattagists had expected. second of all we also had some inflation numbers. consumer price index fell 0.3%

compared with the same month last year and that's the fourth straight month of decline underscoring japan's deflationary trends eaking of e ock market trading let's check where the nikkei average is. it's up about.2%. analysts are saying that china will continue to be a key factor in tokyo. on thursday the nikkei average fell but reversed to positive territory as investors saw a shanghai stock surge. we also need to keep a close eye on china. shares given the ongoing political tension between japan and china. overnight gains in europe are going to provide some support for japanese shares. a bigger gains for the nasdaq.

it finished at hopes that spain is moving towards economic reforms and fixing its troubled finances. the government announced its 2013 budget which focuses on spending cuts having seen some violent protests in madrid investors had been protesting whether the government would take a tough stance on fiscal austeri austerity. ramin. >> how is the situation in spain effecting the currency markets? >> the euro gained a bit. let's take a look at the levels. 77.5$77.59. euro at 1.2908.

dealers bought the euro against the dollar in new york after seeing developments in spain. trading action for dollar yen was a bit more muted as markets focused on developments in europe. that's it for here. back to you. >> sharp is planning to make smart phones the core of its business. they will scale down tv and solar cell divisions. sharp out sources production of its smart phone to taiwan. the first handsets went on sale until china this month. they are due to reach stores in southea southeast asia by the end of this year. it hopes to sell 1.2 units

overseas. that's all for business news for this hour. i'll be back next hour. i'll leave you just with some regional market recaps. israeli prime minister has urged the community to draw a red line that iran should not cross in its nuclear program. >> there's only way to peacefully prevent iran from getting atomic bombs.

that's by placing a clear red line. >> he made the remark in his address to the u.n. general assembly in new york on thursday. he said it's getting very late to stop iran and the country could have enough enriched uranium by next summer. the israeli prime minister said the international sanctions against iran are insufficient to make the country abandon its nuclear program. officials say the number of the syrian refugee mayo the 700,000 by the end of the year. that's more than double the current figure of people who have already fled the country. >> the border policy and the generosity given by host communities who stretch their limited resources to continue

receiving the refugees is extremely important. to help them cope is really crucial. >> the agency regional coordinator said there are 294,000 syrian refugees who have crossed the border into neighboring countries including turkey and lebanon. he added that 2,000 to 3,000 more are arriving every day. unhcr are distributing food and undertaking efforts to prevention diseases at camps. they estimated that 185,000 people would flee syria by the end of the year. the new projection is almost four times higher tn the one made in june. south sudan is expected to resume all exports within a few

months. south sudan won independence from sudan in july of 2011 after two decades of civil war. the agreement was reached between sudanese president and south sudan president on wednesday after weeks of negotiations. the latest agreement failed to resolve a dispute over an oil rich border area. south sudan had been exporting oil through a pipeline and port but suspended oil production in january. expectations are growing that the latest agreement will help normalize relations despite the fact the source of the conflict remains unresolved.

japanese electronic makers are facie ining slumping sales. they are turned their focus to india. japanese company ies have to compete with their south korean rivals. >> reporter: a panasonic researcher walks through the area. >> translator: they put medicine in here. >> reporter: they plan to develop custom tailored to the needs of these consumers. the company faces stiff competition from south korean firms.

>> translator: this stops ice c cubes from melting during a power failure. more than 50% of the fridges in india are made by south korean countries. they designed them with the frequent power failures. the firm is concentrating on air-conditioning. until now most air-conditioners have been window units. they provide cool air not much daylight gets in. a small device attaches to the wall. the rest of the unit sits out doors. to entice customers panasonic devise aesed a slogan, regain y

window. sales have risen from 1 to 13%. >> translator: the number of our customers have rapidly increased. the manufacturer is building a new plant in india. managers hope to start operating this december and produce a million units a year. >> translator: india is the only remaining large market. we're researching the market to make something that hits the right spot with indians. >> reporr: japanese tv manufacturers are trying to make greater inroads here. the driving force behind this success are the sony stores.

300 of them across india. the strategy is not to lower the sales price. the higher price gives prestige to the company brand. >> it's t best brand existing in india right now. >> reporter: to make the brand even stronger, the company broadcasts on its on tv station. indians enjoy watching the sony channel. >> the brand is carried on all the channels and builds an association in the mind of the consumer as high quality. >> translator: i'm convinced that making products that meet the needs of indians and promoting our brand are essential to our success. >> reporter: in recent years japanese makers have been struggling worldwide. the key to beginning market share begins on how they prepare

in india. people in the philippines are getting relief after a typhoon triggered rain in the country. now it's heading to japan. >> it's getting close to japan and the southern islands of japan. it could move in on sunday. here are the current details of the storm. sustained winds are 180 kilometers per hour. moving in a northerly direction at a relatively slow pace. within the next couple of hours storm force winds will affect the islands. waves could reach 12 meters.

in addition to that it's a period of highs so that means e water levels are higher than unusual. then by monday morning local time it could hit western or central japan as a typhoon. it's going to continue to move at a snail's pace. the heaviest rain will be found. we're expecting as much as 250 millimeters in the next 24 hours. more heavy rain is on afterwards so flooding is very highly likely here. it's not the only storm drenching rain. you can see gail force winds are effecting parts of central

japan. even the tokyo area has been dealing with strong winds. it's going to move toward the northeast pulling away from japan. out west strong will be brings in ongoing thunderstorms in parts of the north eastern china as well as the korean peninsula. nice and dry conditions in tokyo. some showers are possible in the morning hours. moving into europe we have strong low pressure system moving in to the northern british isles bringing blustery winds. out east slow moving has been dumping drenching rain.

temperatures are looking quite moderate out towards the west. 16 degrees expected in london. 18 in paris. out toward the east still on the warmer side. 20 degrees in moscow. 25 in kip and down towards the south excessive heat. 33 degrees expected in athens on your friday. here is the extended forecast.

our lead story this hour, a senior chinese communist party leader has played host to some elder statesmen from japan. politicians from both countries are taking tns criticizing each other over a dispute in the east china sea. he's a member of the communist party bureau standing committee. he holds the fourth most powerful position in the party. he met with the delegation of japanese lawmakers of the japan business federation and friendship associations. japan nationalized the islands two weeks ago. china and taiwan claimed the territory. he criticized japan for going ahead with the purchase despite protests. the country's normalize diplomatic ties 40 years ago.

he says the relations have been significant development during that time and have brought great benefits to both countries. that's all for this edition of "newsline." thanks for joining us.

captioning sponsored by macneil/lehrer productions >> brown: at the united nations, israel's prime minister urged world leaders to draw a clear red line and stop iran's nuclear program. good evening, i'm jeffrey brown. >> woodruff: and i'm judy woodruff. on the "newshour" tonight, we get two views of benjamin netanyahu's speech in which he warned that tehran could be capable of making an atomic weapon next year. >> brown: then, was the attack on the u.s. mission in libya the work of al qaeda? we take a look.